Pace (Pakistan) Limited

Pace (Pakistan) Limited (PSX: PACE) is a public limited company incorporated in Pakistan. The company began its operations in 1995 and is engaged in building, acquiring, managing and selling departmental stores, condominiums, supermarkets, shopping plazas, housing societies, utility stores, plot as well as other kinds of property.

The company also conducts commercial, industrial and other related activities within and outside Pakistan. Pace is a part of First Capital Group which owns and operates a diversified business portfolio in financial services, real-estate development, media and telecom sectors.

Pattern of Shareholding

As of June 30, 2025, PACE has a total of 278.877 million shares outstanding which are held by 10,619 shareholders. Local general public has a majority stake of 64.59 percent in PACE followed by its associated companies holding 16.71 percent shares.

Pioneer Services Limited (a foreign company) accounts for 7.82 percent shares of the company while joint stock companies hold 6.57 percent shares. Around 3.42 percent shares of PACE are held by foreign general public. The remaining ownership is distributed among other categories of shareholders.

HistoricalPerformance (2019-25)

Except for a staggering rise in 2022 and 2024, PACE’s topline has posted year-on-year decline in all the year under consideration. Barring 2024, the company has never posted net profit in any of the years under consideration.

PACE’s gross margin which was in the negative zone in 2018 recovered thereafter to boast its optimum value in 2021. It then plunged in 2022 followed by a rebound in 2023.

In 2024, gross margin dipped again and then recovered in 2025.Operating margin only touted a positive figure in 2022, 2024 and 2025 with the highest level attained in 2024.

Conversely, net margin continued to hover in the negative zone throughout the period under consideration except 2024 (see the graph of profitability ratios). The detailed performance review of the period under consideration is given below.

In 2019, PACE’s topline slid by 28.67 percent year-on-year to clock in at Rs.456.48 million. This was on account of no revenue derived from the sale of property during the year. Revenue from development services also registered a plunge in 2019.

The cost of revenue slid by 46.54 percent year-on-year in 2019 due to lesser cost incurred from shops and commercial buildings sold during the year. Write down value of inventory to net realizable value also plummeted during the year. This resulted in a gross profit of Rs.110.01 million in 2019 versus gross loss of Rs.8.15 million posted in 2018.

The company was able to curtail its operating expense by 21.89 percent in 2019 on account of lower payroll expense as the company streamlined its number of employees from 236 in 2018 to 231 in 2019. Another reason for lower operating expense was less commission on sales incurred in 2019.

PACE’s other income fell by a massive 94.18 percent in 2019 due to high-base effect as the company recognized gain on sale of non-financial assets in the last year particularly investment property. Gain recognized on the settlement of loans in 2018 was also missing in 2019 resulting in thinner other income.

PACE operating loss ticked up by 2.89 percent in 2019 to clock in at Rs.65.40 million. Finance cost escalated by 21.27 percent year-on-year in 2019due to higher interest on redeemable capital incurred during the year.

PACE’s gearing ratio surged from 62 percent in 2018 to 79 percent in 2019. Exchange loss from foreign convertible bonds also magnified by 160.86 percent in 2019. However, unlike previous year, PACE recognized gain from change in the fair value of investment property in 2019.

The company incurred net loss of Rs.929.25 million in 2019, up 73 percent year-on-year. This translated into loss per share of Rs.3.33 in 2019 versus loss per share of Rs.1.93 recorded in 2018.

PACE’s revenue further slumped by 46.52 percent to clock in at Rs.244.12 million in 2020. This was mainly attributable to significantly less revenue from development services. Cost of sales tumbled by 48.72 percent year-on-year in 2020 owing to lower construction cost and operating cost related to plazas.

Gross profit in 2020 was 39.59 percent less than that of previous year, however, GP margin improved to 27.22 percent in 2020.

PACE incurred 48.17 percent higher administrative and selling expense in 2020 on account of higher payroll expense coupled withan uptick in legal and professional charges. Other income boasted a tremendous 355.36 percent year-on-year jump in 2020 due to gain recognized onthe settlement of loans.

Operating loss amounted to 165.87 percent in 2020 to clock in at Rs.173.88 million. Finance cost hiked by 48.55 percent in 2020 due to higher discount rate for most of the year.

The bottomline was somehow buttressed by lower exchange loss from foreign convertible bonds which shrank by 91 percent in 2020. Gain from change in the fair value of investment property also rose by 750.56 percent. This squeezed the net loss by 57.18 percent year-on-year in 2020 to clock in at Rs.397.88 million with loss per share of Rs.1.43.

In 2021, PACE’s revenue slipped by 12.33 percent year-on-year to clock in at Rs.214.02 million. This was due to a drastic drop in revenue from development services. Rental income from lease of investment property also declined in 2021.

Cost of revenue registered a massive fall of 57.36 percent due to lower construction and operating cost related to plazas. This resulted in 108 percent rebound in gross profit in 2021 whichtranslated into GP margin of 64.60 percent – the highest level during the period under consideration.

PACE incurred 26.19 percent lower administrative and selling expense in 2021 due to lower payroll expense, thin legal and professional charges as well as a drop in impairment loss on trade and other receivables. Other income slumped by 26.26 percent year-on-year in 2021 due to high-base effect as the company recognized gain on settlement of loan in the previous year.

Operating loss in 2021 came out to be Rs.70.90 million, 59.23 percent lower compared to previous year. Finance cost also dived down by 34.64 percent in 2021 owing to monetary easing.

PACE recognized exchange gain of Rs.156.01 million on foreign convertible bonds in 2021 unlike exchange loss incurred in the yesteryears.

Conversely, gain from change in the fair value of investment property posted 88 percent slump in 2021. PACE’s net loss fell by 88.36 percent year-on-year in 2021 to clock in at Rs.46.32 million with loss per share of Rs.0.17 – the lowest among all the years under consideration.

After three consecutive years of topline fall, PACE’s net revenue posted a staggering 487 percent year-on-year rise in 2022 to clock in at Rs. 1256.33 million. This was due to tremendous growth in the sale of inventory in 2022. This included sale of pace tower units, completed units and land. Cost of revenue also hiked by 1092.24 percent on account of spike in the cost of construction in 2022.

Gross profit grew by 155.36 percent in 2022; however, GP margin drastically fell to 28.10 percent.

Administrative and selling expense hiked by 54.41 percent in 2022 due to higher impairment loss on inventory, fixed assets, trade and other receivables as well as escalation in repair and maintenance expense during the year. Other income registered a robust rebound of 859 percent in 2022 on the back of gain on the settlement of loan/lease liability.

As a consequence, PACE boasted an operating profit of Rs.372.04 million in 2022 after four years of posting consistent operating losses. OP margin clocked in at 29.61 percent in 2022. Finance cost surged by 16.26 percent in 2022 due to spike in discount rate.

PACE also incurred massive exchange loss worth Rs.818.89 million on foreign convertible bonds due to drastic decline in the value of Pak Rupee. Gain from change in the fair value of investment property improved by 62.46 percent in 2022.

Higher exchange loss was the main culprit which resulted ina massive net loss of Rs.618.44 million in 2022, up 1235 percent year-on-year. Loss per share also climbed up to Rs.2.22 in 2022.

Followed by a splendid revenue growth in 2022, came a topline drop of 80.75 percent in 2023. PACE’s net sales clocked in at Rs.241.81 million in 2023. This was on account of a steep fall in the sale of completed units in 2023 coupled with no sale of Pace Tower units and land. This was the result of shattered investor confidence and lower remittances. Cost of revenue also dropped by 86.85 percent in 2023.

Gross profit shrank by 65.16 percent in 2023; however, GP margin improved to 50.87 percent.

Administrative and selling expense ticked up by 14.37 percent in 2023 due to drastic surge in the impairment loss on trade and other receivables. Other income slipped by 60.64 percent in 2023 due to lower gain on the settlement of loans. PACE incurred operating loss of Rs.85.15 million in 2023 versus operating profit of Rs.372.04 million in 2022.

Finance cost posted an uptick of 16.92 percent in 2023 due to unprecedented level of discount rate. Exchange loss escalated by 73.58 percent in 2023 due to unabated depreciation of Pak Rupee.

Gain from change in the fair value of investment property improved by 51.59 percent in 2023. Net loss magnified by 171.26 percent in 2023 to clock in at Rs.1677.60 million with loss per share of Rs.6.02 – the highest ever net loss posted by the company.

In 2024, PACE recorded a whopping 750.36 percent year-on-year growth in its topline which clocked in at Rs.2056.24 million.

The growth in net sales was led by the sale of shops and plots during the year. Massive rise in the construction cost of shops and commercial buildings sold resulted in 1049 percent year-on-year spike in cost of revenue in 2024. In absolute terms, gross profit improved by 461.94 percent in 2024, however, GP margin fell to 33.62 percent.

Administrative & selling expense dipped 23.24 percent in 2024 due to lower impairment loss booked on trade and other receivables.

PACE’s other income rebounded by 60.19 percent in 2024primarily on account of liabilities written back during the year. Superior other income coupled with improved sales resulted in operating profit of Rs.632.16 million in 2024 versus operating loss of Rs.85.15 million posted in 2023.

Finance cost ticked up by 21.84 percent in 2024 due to higher interest incurred on redeemable capital and also because of higher discount rate.

PACE recorded exchange gain of Rs.153.52 million on foreign currency convertible bonds in 2024 due to stability in the value of local currency off late. This was against the exchange loss of Rs.1421.45 million incurred by the company in 2023. PACE posted loss of Rs.10.88 million from change in the fair value of investment property in 2024.

The company was able to register net profit of Rs.526.69 million in 2024.This was the first time after 2017 that the company posted a positive bottomline. EPS was recorded at Rs.1.89 in 2024 while NP margin stood at 25.61 percent in 2024.

In 2025, PACE’s net sales deteriorated by 43.25 percent to clock in at Rs.1166.88 million. This was due to rising construction cost, slowdown in remittances, shrunken purchasing power of local buyers, elevated financing rates as well as regulatory and taxation burdens.

Liquidity constraint was also one of the barriers which kept PACE from undertaking and completing new projects in 2025.

The fall in net sales was particularly due to a drastic decline in the sale of completed units in 2025. These included Islamabad plots, The Palm and various shops in PACE shopping malls. PACE tried to offset its impact by focusing on rental income and advertisement.

Cost of sales plunged by 48.54 percent in 2025. This resulted in gross profit of Rs.464.50 million in 2025, down 32.81 percent year-on-year. GP margin improved to 39.81 percent in 2025. Administrative expense surged by 21 percent in 2025 due to higher payroll expense, legal & professional charges as well as impairment loss booked on inventory.

Other income dwindled by 73.73 percent in 2025 due to high-base effect as the company wrote back liabilities in 2025. Operating profit fell by 66.81 percent in 2025 with OP margin dropping to 17.98 percent. Finance cost tumbled by 15.15 percent in 2025 due to monetary easing.

PACE recorded exchange loss worth Rs.96.06 million on foreign currency convertible bond due to depreciation of Pak Rupee during the year.

Unlike last year, the company recorded gain of Rs.5.71 million from change in the fair value of investment property. PACE posted net loss of Rs.87.324 million in 2025. This translated into loss per share of Rs.0.31 in 2025.

Recent Performance (1QFY26)

During the first quarter of the ongoing fiscal year, PACE posted year-on-year decline of 68 percent in its revenue, which clocked in at Rs.151.567 million. This was due to a radical fall in the sale of pace tower units in 1QFY26.

Correspondingly, cost of sales dipped by 74.21 percent in 1QFY26. This resulted in 61 percent thinner gross profit in 1QFY26;however, GP margin clocked in at 57.21 percent versus GP margin of 46.96 percent posted in 1QFY25.

Administrative & selling expense escalated by 101.32 percent in 1QFY26. This might be due to impairment loss booked on inventory and receivables. Legal & professional charges also appear to be the culprit behind elevated operating expense in 1QFY26.

Other income posted a staggering growth of 3649 percent in 1QFY26. This was due to gain recognized on the disposal of its entire 56.79 percent shareholding in PACE Super Mall (Private) Limited to First Capital Securities Corporation Limited for Rs.452.854 million which yielded a gain of Rs.361.64 million.

As a result of a robust other income, PACE was able to post 92.32 percent improvement in its operating profit in 1QFY26. OP margin clocked in at 244.44 percent in 1QFY26 versus OP margin of 40.63 percent posted in 1QFY25. Finance cost surged by 23.76 percent in 1QFY26 due to higher interest incurred on redeemable capital and lease liability.

Exchange gain on foreign currency convertible bonds mounted by 289.61 percent in 1QFY26. Net profit improved by 130.86 percent to clock in at Rs.362.148 million in 1QFY26. This translated into EPS of Rs.1.30 in 1QFY26 versus EPS of Rs.0.56 posted in 1QFY25. NP margin progressed from 33 percent in 1QFY25 to 238.94 percent in 1QFY26.

Future Outlook

Thinner remittances from overseas Pakistanis, imposition of higher existing and new taxesand risk aversion of both local and foreign investorson account of macroeconomic and political headwinds will continue to pose dire challenges to the real-estate sector. This coupled with escalated construction cost, higher electricity tariff as well as lower purchasing power of investors will affect the overall performance of the real-estate sector.

As of September 2025, PACE’s current liabilities exceeded its current assets by Rs.5624.069 million. Accumulated loss of the company stood at Rs.3978.374 million.

Due to persistent losses, the company’s equity stood at negative 828.278 million as of September 2025. This raises significant doubt on the ability of the company to continue as a going concern, realize its assets and discharge its liabilities.

The company is actively looking for lucrative investment opportunities just like investment in Pace Circle to transform its non-income producing assets into cash-flow operating assets. The company has also recently announced the completion of its project, First Capital Tower.

The company is also diversifying into print and social media business. Rental income is another source of income for the company. Besides, the company is expediting the sale of its units in Shadman project by engaging zameen.com.

Apart from diversifying its sources of revenue, the company is also focusing on restructuring its loans to support its balance sheet and provide enough liquidity for its ongoing operations. One such step is the issuance of new shares through ESOS at 10 percent discount. PACE is also converting its TFC liability worth Rs.1082.398 million into 120,266,424 ordinary shares at a price of 9 percent per share. This will reduce the outstanding liabilities and finance cost of the company.

The company is also increasing its authorized capital from Rs.6000 million divided into ordinary shares of 600 million to Rs.18000 million divided into 1800 million shares. While the company disposed off its shareholding in PACE Super Mall (Private) Limited in 1QFY26, the shareholders have also approved divestment in Pace Barka Properties Limited.

With a streamlined debt profile, stronger capital base and diversified sources of income, PACE is all set to enhance its shareholder value in 2026.